Punitive Damages in China: Evolution and Application

The revised Law on the Protection of the Rights and Interests of Consumers (Consumer Protection Law), which sums up nearly twenty years of the evolution of Chinese punitive damages regulations, sets out a model system of punitive damages. These are in essence a special kind of penalty under a dual public-private legal system in which the punitive and deterrent functions of public law are realized through the mechanism of private law. Their application should be guided by the public law principle that the penalty should be proportionate to the offence. The question of whether the penalty is appropriate arises in the application of the two forms of punitive damages prescribed in the Consumer Protection Law—whether used separately or together, or in conjunction with or independently of fines or financial awards. The application of the new punitive damages regulations may overlap with the application of China’s Food Safety Law and Tort Liability Law.